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2023 (11) TMI 1148 - AT - Income TaxPermanent Establishment in India - Dependent Agent (DAPE) - advertisement revenue - India-Mauritius DTAA - assessee is a foreign company, registered under the laws of Mauritius engaged in the business of telecasting its sports channel - “Ten Sports” - assessee appointed Taj India as advertising sales agent to sell commercial advertising time to prospective advertisers and other parties in India, in connection with business of programming and telecasting on “Ten Sports” / “Ten HD” / “Ten Golf” channels and to collect advertisement charges from Indian exporters and advertisers on behalf of the assessee - HELD THAT:- As in respect of Advertisement revenue no material has been brought on record by the Revenue that Taj India has habitually exercised the authority to conclude the contract on behalf of the assessee. Therefore, with respect to Advertisement income, the Revenue failed to discharge the burden cast on it to prove that the twin conditions as laid down in Article 5(4)(i) of the India Mauritius DTAA are satisfied in the facts of the present case. Thus the conclusion of the coordinate bench of the Tribunal in the preceding year (cited supra) is equally applicable with respect to the Advertisement revenue and Taj India cannot be held to be a DAPE of the assessee in India under Article 5(4)(i) of the India-Mauritius DTAA in respect of the same. Accordingly, the conclusion of the learned CIT(A) on this issue is set aside and the ground raised by the assessee is allowed. P.E. with respect to its Distribution function - As per the assessee, despite the grant of authority to the Taj India to enter into agreements with third parties on behalf of the assessee, no such agreement was entered, and therefore, the twin conditions as laid down in Article 5(4)(i) of the India-Mauritius DTAA are not satisfied in the present case - HELD THAT:- It is evident from the record that no material has been brought on record by the Revenue, in the present case, to show that Taj India has habitually exercised authority to conclude the contract on behalf of the assessee. In the absence of any allegation of any change in facts or law, we find no reason to deviate from the conclusion so reached by the coordinate bench in the aforesaid decision in assessee’s own case in the preceding assessment year. Accordingly, we find no infirmity in the findings of the learned CIT(A) in holding that the assessee does not have a P.E. with respect to its Distribution function. As recently the coordinate bench of the Tribunal in assessee’s own case in Taj TV Ltd v/s DCIT [2023 (4) TMI 568 - ITAT MUMBAI] held that advertising and subscription income received by the assessee is not taxable in India as the assessee does not have any P.E. in India. TDS u/s 195 - Non deduction of TDS on disallowance of programming cost, transponder fees, and uplinking charges - addition u/s 40(a)(ia) - HELD THAT:- We find that the coordinate bench of the Tribunal in assessee’s own case in ADIT v/s Taj TV Ltd. [2016 (8) TMI 504 - ITAT MUMBAI] while deciding the similar issue in favour of the assessee the programming cost is paid to the assessee to various non-resident outside India for acquiring right brought on sports events taking place outside India. Thus, such programming cost cannot be deemed to arise in India as liability to pay programming cost as assumed by the assessee company outside India and it cannot be held to be borne by any PE in India. As in the aforesaid decision, the coordinate bench of the Tribunal after taking into consideration the decision of the Hon’ble Delhi High Court in CIT v/s New Skies Satellite BV [2016 (2) TMI 415 - DELHI HIGH COURT] held that the definition of the term “Royalty” as enlarged by the Finance Act, 2012 will not have any effect on Article 12 of the DTAA. We further find that in another decision rendered in assessee’s own case for the assessment year 2017-18 [2023 (4) TMI 568 - ITAT MUMBAI] the coordinate bench of the Tribunal deleted the disallowance made in respect of payment of programming costs, transponder fees, and uplinking charges. Thus we find no infirmity in the impugned order deleting the disallowance of programming cost, transponder fees, and uplinking charges made under section 40(a)(i) - Decided in favour of assessee.
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